1.To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 10 years to maturity. This bond has a 6.25% annual coupon, paid semiannually, sells at a price of $935, and has a par value of $1,000. If the firm's tax rate is 35%, what is the component cost of debt for use in the WACC calculation?Do not round your intermediate calculations.

2.Keys Printing plans to issue a $1,000 par value, 25-year noncallable bond with a 6.00% annual coupon, paid semiannually. The bond will be selling at $1,050.The company's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 25.00%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted?

3.S. Bouchard and Company hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0= $1.58; P0= $32.00; and g = 5.00% (constant). The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $45.00. Based on the DCF approach, by how much would the cost of equity from retained earnings change if the stock price changes as the CEO expects?Do not round your intermediate calculations.

4.Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1= $1.75; P0= $35.50; g = 7.00% (constant); and F = 8.00%. What is the cost of equity raised by selling new common stock?

5.ZYX, Inc. recentlyhired you as a consultant to estimate the company's WACC. You have obtained the following information.

- ( 1) The firm'snoncallable bonds mature in 2 5years, have an 5 .50 %semi-annualcoupon, a par value of $1,000, and a market price of $905.00 .The firm has 800,000 bonds outstanding.

- ( 2) The company's tax rate is 40%.

- (3) The firm has 6%, $100 par value preferred stocks. There are 2 million shares outstanding. The preferred stock currently sells at $110 per share.

- (4)The risk-free rate is2.00 %, the market risk premium is 8.50%, and thecommon stock'sbeta is1.10 .

- (5) The firm has 15 million shares outstanding of common stocks which sells at $80 per share. The firm just paid a dividend of $2.25 per share, and the constant growth rate is expected to be 7%.

- (6) Thefirmwould like to use the average of the two methods (i.e. CAPM and DCF) toestimate the cost of equity, and it does not expect to issue any new common stock.

Whatis its WACC?Do not round your intermediate calculations.